There is much to be said for being a specialist in a certain market or area, but sometimes it’s good to find a new neighborhood to work in. We have a few tips for finding new areas, ones that successful borrowers have shared with us. While there are several things to be considered, the one constant is that in each of these cases people are making investments based on the future of the area, same as you are.
Research indicates that there is a correlation between the restaurants and the revitalization and redevelopment of an area. According to The Eater, cafes are usually first, followed by bigger and higher-end full-scale restaurants, with the last stage being the name brands. While opportunities will exist at each stage, it’s helpful to know what to look for and what to expect next. As a bonus, as you check out these areas it may be fun to try some different restaurants, or it may be useful to focus on one and watch the changes over time.
Crime statistics are usually easy to find for a given area. Comparing trends in property crime, violent crime and fire statistics over a few years can give a good indication of the direction of a neighborhood.
According to the EPA, who is concerned with community planning, “Investments in schools both respond to and influence growth.” Either way, schools are a good indicator of expected growth in an area and are almost certain to bring in new families.
Governments frequently take a long time to participate in an area’s revitalization, but when they do it can give a second wind to the effort. Because these types of projects take a long time to get approved and then executed, by staying up on local developments you can get a project in the area that will be coming available, as the benefits from the infrastructure development are coming online. Public transit especially impacts neighborhood values.
Not every area will have everything going their way, and the best results will come from choosing 4 or 5 areas to keep an eye on. This will do two things for you; the first is that it will increase your odds of finding a good property, but just as important, is the fact that you will have something to compare and learn from. It’s frequently hard to recognize a change when you are standing at the beginning of the activity (think watching a pot boil), but if you are comparing several different criteria, it will be easy to pick up the differences and nuances and therefore make more informed decisions.
While just visiting these areas you will notice indicators right away, change takes time. As you keep an eye on these areas over a few months, you will notice development and have a good idea of what’s coming next. You will also develop the confidence to start a project and participate with other players in the future of the area.
by David Nielson, Boomerang Capital Partners